The new and improved Customer Experience Glossary is filled with the terms and various acronyms that every CX expert needs to know like: NPS, VoC, CS, CSAT, CDT, SOW, CBCV, CES, NLP and more.
Over the past 12 years, CX has grown into its own industry discipline, and its adoption has jumped significantly in the last 5. The task of coordinating and overseeing customer experience has even earned its own C-suite role. So, what is customer experience exactly?
The precise definition of CX varies between organizations, but there are a few widely accepted points that appear consistently. In our own words: “Customer experience is everything perceived and remembered by a customer, in relation to an organization from which they purchase products and/or services.”
CX terms are changing constantly as the discipline lives, breathes, and grows along with its practitioners and, more importantly, the market. We’ve compiled the terms and ideas we believe are the most important to understanding the core concepts of CX, plus terms related to the necessary market research.
The Customer Experience Glossary is always growing, and we’ve even included a few of our own terms to help it along. Whether you’re new to CX or just need a refresher, you can start here!
Categories about Customer Experience Glossary
Customer Experience – CX Glossary
Customer Key Performance Indicator (Customer KPI)
Any numeric value that demonstrates the effectiveness of a company in achieving a key business goal regarding customer experiences. Customer survey metrics are often used as customer KPIs.
Customer Experience (CX)
Customer Experience is everything perceived, felt, and remembered by a customer, empathetically related to both their social reality and personal (or professional) needs before, during, and after a purchase. CX is comprised of perceptions of quality, social status, relationship, brand identification, and relative price.
Customer Experience Management (CXM)
Everything a company can manage to motivate customers to make a positive choice to buy, re-buy, subscribe, or renew. The CXM is comprised of products, people, processes, location, communication, and competition.
The path the customer takes, from the moment the need arises to beyond the moment it’s fulfilled. Your customer journey is designed so the company can manage the customer experience at all available opportunities of interaction.
Customer Journey Map
A visual aid charting the path the customer persona takes, from the moment the need arises to beyond the moment it’s fulfilled. A map identifies stages, actions, and feelings experienced throughout the journey. It provides an overall understanding of customer pain points, efforts, inquiries, concerns, and other valuable insights on the customer experience.
The difference between a company’s communicated offers through branding and marketing and the customers’ perceptions of what was actually received. A company should understand their customers’ expectations when communicating their value proposition to avoid promising something that can’t be delivered.
Example: A brand advertises that its energy drink will give you wings. It does not, in fact, give you literal wings when you drink it. This can be considered an expectation gap.
Everything perceived, felt, and remembered by the employee, empathetically related to their social reality, personal, and professional goals. A positive employee experience is key to creating a Customer-Centric organization.
The patient experience describes an individual’s experience of illness/injury and how the healthcare system treats them, including parts of the experience beyond actual treatment, such as comfort, billing, insurance, patient feedback, online interaction, scheduling appointments, and more.
User Experience (UX)
Any interaction that the user of a product or service has with the provider. This term is most commonly used when referring to software applications, but can apply to any product or service. Seamless, effortless interactions and intuitive design are considered key to a good UX. Be careful, it’s easy to mix up UX and CX concepts.
Example: Apple’s UX is regarded very highly for being intuitive for new users, quick to adjust to, and able to integrate features and apps across multiple devices easily.
Chief Experience Officer (CXO)
An executive role that is responsible for designing and monitoring customer experiences and interactions with their company throughout the entire customer journey. Typically reports to the CEO, but this may differ between organizations.
Interchangeable with Chief Customer Officer (CCO). Sometimes takes the place of/shares similar responsibilities with the Chief Marketing Officer (CMO).
Refers to the entire lifecycle of a customer’s experience with a brand or product.
This concept encompasses the entire path that the customer takes within the company – from prospect to converted customer. Once the company identifies which stage of the cycle the customer is in, it is possible to perform segmented and specific actions, based on different offers and interactions.
The customer lifecycle has five main steps to success. They are:
- Acquisition: Conversion of segmented leads into customers;
- Activation: Activation occurs when the user experiences the product/service and has his first experience as a customer, at which point he begins to see the value that was offered;
- Retention: Tactics to keep the customer base engaged, through Customer Success processes;
- Referral (Recommendation): Moment when the customer perceives the value of the product/service and recommends it to others;
- Revenue: Conversion of customer base into financial return.
Customer Success (CS)
The department within a company responsible for managing the customer relationship.
Customer Success (CS) has the enormous mission of being responsible for managing and carrying out the customer-supplier relationship and ensuring that customers are successful in using its products and services. The concept of success is strongly linked to value delivery – that is, how your product or service delivers value to your customer.
Customer Success Management (CSM)
The profession that integrates marketing, sales, professional services, training, and support functions and activities.
Most common in businesses with a recurring revenue model in the B2B segment, in which the CSM (Customer Success Manager) actively manages the success of individual customers. This role focuses on optimizing their business, reducing their churn rate, generating profits, and increasing the predictability of recurring revenue.
Customer Relationship Management (CRM)
Software that helps business owners quickly and efficiently manage individual customer relationships through an automated system. Consolidates all customer communication channels (email, text, social media, calls, etc.) into one place to simplify tracking of and response to customer issues.
Market Research, Metrics and Analytics – CX Glossary
Artificial Intelligence (AI)
The theory and development of computer systems able to perform or mimic tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages. In a business setting, AI systems are frequently used to automate routine tasks, freeing human agents to handle more complex interpersonal tasks.
Machine Learning (ML)
Machine learning is a sub-field of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. There is supervised and unsupervised machine learning.
Supervised: Machine learning that utilizes training data which contains both example domain elements and their correct outputs. Usually this must be labeled by hand.
Unsupervised: Machine learning that utilizes training data that contains only example domain elements without the
expected outputs. Examples include clustering data.
Natural Language Processing (NLP)
Broadly defined as the automatic manipulation of natural language, like speech and text, by software.
Cognitive Dialogue Technology
A survey system that uses artificial intelligence to adapt the questions it asks. This helps respondents express their compliments or concerns better than they may be able to in a designed survey and provides more detailed information about the topics discussed than a naive free-response survey.
An approach to measuring experiences by observing signs and phenomena via non-numeric data, such as human actions, reactions, and behaviors. In most cases, this is done through interviews and focus groups.
An approach to measuring experiences by observing signs and phenomena via numerical data, usually through statistics, mathematics, and computations.
Worthix (or Worth Index)
A metric that measures how “worth it” a product or experience is to a customer. It can be explained by analyzing the 5 key Decision Drivers (Price, Social Proof, Quality, Relationship, Brand Identification) and determining the impact that specific experiences have on the customer’s decisions. The name comes from the final question we ask ourselves before every buying decision, “Is it worth it?” It’s an index, an indicator or measure of something. Together the words make up the Worth Index, thus, Worthix.
Net Promoter Score® (NPS)
A survey metric to measure customer word-of-mouth potential. Created by Fred Reicheld and Bain & Company, NPS asks customers how likely they are to recommend a company to a friend and then lumps them into one of three categories: promoters, passives, and detractors. The Net Promoter System and Net Promoter Score are registered trademarks of Bain & Co. Inc., Fred Reichheld and Satmetrix Systems, Inc.
Customer Satisfaction (CSAT)
A simplistic survey metric used to assess whether a customer is satisfied or not. Defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals.”
A questionnaire that companies use to poll customers and get organized feedback. When these surveys are developed internally, they risk being invalidated by preconceived, unconscious biases that originate from the company’s particular point of view. To avoid skewing survey data, it is almost always better to outsource the development and administration of surveys to a third party.
Customer Effort Score (CES)
Customer Effort Score (CES) is a single-item metric that measures how much effort a customer has to exert to get an issue resolved, a request fulfilled, a product purchased/returned or a question answered.
Customer-Based Corporate Valuation (CBCV)
Customer-based corporate valuation is the process of valuing a firm by forecasting current and future customer behavior using customer data in conjunction with traditional financial data.
A sample is a set of individuals or objects collected or selected from a population by a defined procedure. The appropriate sample size for the measurement of a statistic will vary based on the size of the population being surveyed and the variance of the statistic being measured. A larger sample size will, in general, reduce the margin of error on a measurement.
Margin of Error
The half-width of the confidence interval.
An estimate for plausible values of a population statistic. It has an associated confidence value/gamma. If an experiment were repeated, the fraction of the confidence intervals produced that contain the true statistic would tend towards/gamma.
Market segmentation is the process of dividing a market of potential customers into groups, or segments, based on distinct characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations. These segments can be used to create buyer personas, which are a helpful aide for both sales and marketing teams.
Share of Voice (SOV)
A measure of the market your brand owns compared to your competitors. It acts as a gauge for your brand visibility and how much you dominate the conversation in your industry. The concept is similar to a brand being “top of mind” when customers think of a product or service.
Share of Wallet (SOW)
Share of wallet (SOW) is the dollar amount an average customer regularly devotes to a particular brand rather than to competing brands in the same product category.
The percentage of an industry, or a market’s total sales, that is earned by a particular company over a specified time period. Market share is calculated by taking the company’s sales over the period and dividing it by the total sales of the industry over the same period.
Voice of Customer (VoC)
Any customer feedback captured through various channels that can be used to determine customer expectations, preferences, and aversions.
Listen to Season 9 of the Voices of CX Podcast
Customer Lifetime Value (CLV)
A prediction of the net profit attributed to the entire future relationship with a customer. Methods for calculating this value vary in terms of accuracy and sophistication.
Empathy at scale
The ability to maintain empathetic, human-centric interactions with many people at once.
One of the most difficult challenges in business is maintaining human empathy as an organization grows. As business processes and staff expand and diversify, people in higher-ranking positions (C-suite especially) tend to become increasingly distant from their core customers over time.
The gathering of important or relevant information for the purpose of strategic decision-making.
Includes information about customers’ experiences, perceptions, transactions, or competitors.
Abbreviated as intel.
Example: A CEO needs significant amounts of business intelligence to make critical decisions about corporate strategy. This business intelligence often comes in the form of reports from other C-suite roles (such as the CMO, CFO, CPO, etc.) which contain key metrics and information about customers, products, financial data, competitor strategies, market trends, etc.
Human in the loop (HITL)
A model where the outputs of a system are monitored and/or altered by a user.
Example: An AI program using HITL is monitored by humans for inaccuracies and screened for biases.
A customer’s opinion or evaluation of a product or service. Can be affected by subjective or objective comparisons.
Perceived value is a relative measure, subject to whatever alternatives to any particular product or service currently exist in the market.
Example: The perceived value of a Big Mac may be higher for someone who has never eaten a Wagyu burger, or vice versa.
A type of advanced analytics used to predict future events and trends based on historical data through a variety of techniques, including artificial intelligence, machine learning, and data mining.
Natural Language Understanding (NLU)
A subcategory of computer science that looks at what language means (reading comprehension), rather than simply what individual words say.
Example: Voice assistants, such as Siri, Alexa or Cortana, or certain chatbots, use NLU to interpret user intentions by recognizing intent and entities within spoken or written language.
Worthix – CX Glossary
Worth It Conclusion
The “yes, it’s worth it” conclusion is the last and most powerful conclusion customers come to before making most of their decisions. When something is the most “worth it” alternative, it means the customer has already agreed to pay the perceived costs to have access to the expected emotional and rational benefits. Therefore, knowing if your business is the most “worth it” alternative to your customers, is more important than knowing how satisfied they are or whether they will recommend your business.
Worthix (or Worth Index)
A metric that measures how “worth it” a product or experience is to a customer. It can be explained by analyzing the 5 key Decision Drivers (Price, Social Proof, Quality, Relationship, Brand Identification) and determining the impact that specific experiences have on the customer’s decisions.
Customer Decision Process/Loop
This process begins when either the market or life generates a need or expectation in the customer. The customer considers market offers, weighs their benefits, assesses their thoughts and feelings about it, and then decides whether it’s worth buying or not. The choice may differ from what the customer desires, as long as it fulfills the present need.
Example: I need a car. I want a Ferrari. The limiting factors of my budget or the road conditions of my city limit me to the benefits of a Toyota Corolla.
Any factor involved in a purchase decision that has the potential to drive the decision toward a conclusion. The five primary decision drivers, Quality, Price, Social Proof, Relationship and Brand Identification, explain 92% of “worth it” conclusions.
When a customer identifies with a brand, they believe the brand understands who they are, their lifestyle challenges, and contributes to their personal values and objectives.
Example: A coat from REI will keep you warm and it’s guaranteed that it’s made with a certain amount of recycled materials. It’s both functional and fulfills personal values that environmentally conscious customers identify with.
Social Proof (or Social Status)
This perception is related to how much the customer understands that what they consume is accepted and approved by people in their current or desired social profile. The higher the social status, the more they perceive that they stand out positively and are accepted within the group. The lower the social status, the more they perceive that they stand out negatively and are excluded from the group. It is understood that the product or service is accepted and used (or not) by people within the customer’s own persona.
Example: a Mercedes Benz is often associated with a richer individual of higher social standing, while a Toyota is often associated with a poorer individual of lower social standing.
Impact is a measure of how much of an effect a decision driver or experience has on your customers’ perception of worth. Worthix measures impact for each of the 5 primary decision drivers (Quality, Price, Relationship, Social Proof, Brand Identification). Impact is a measure of how important that driver is to your customers.
Example: If your Quality driver has an impact of 7 and your Relationship driver has an impact of 4, you would expect a change in the Quality driver score to change your total Worth Score more than an equal change in the Relationship score, ceteris paribus.
An AI that interacts directly with the end-user in real-time. Possible end-users can include both customers and customer service agents.
Examples: Worthix adds front-end AI (LUCI) to Voice of Customer surveys. LUCI inserts targeted questions into the VoC questionnaire to probe for more details while the customer is engaged, streamlining the gathering of detailed and highly relevant feedback.
AI-based chatbots can be considered front-end AI for customer service.
Personal voice assistants (Ex. Siri, Alexa, Cortana) are considered front-end AI.
An AI language assistant suggesting conversational routes to an account rep. or service agent would be considered front-end AI (Cogito).
An AI that functions outside of the view of/does not interact with the end-user.
Example: An AI might sort previously gathered data into categories for easier use by human designers and/or analysts. Back-end AI is used in numerous applications at almost every organizational level and/or department. Some common uses include automation, data analysis, monitoring, alerts, and language recognition.
Software as a Service (SaaS)
A business model that delivers and/or licenses software that is accessed over the internet via the browser or an application, without installation. Typically operates through a recurring revenue model, where services or applications are paid for periodically.
General Industry Jargon – CX Glossary
A fictitious person that represents a larger group of customers through various social demographics such as similar lifestyle, interests, needs, goals, challenges, and buying habits. Personas are useful for segmenting marketing strategies and communicating who the customers are across an organization, usually through a customer journey map. They should be designed based on both customers’ needs and revenue-generating potential.
Those perceiving the experience(s) who hold the need for something. He/she typically searches the market to find the option most worth it to fulfill their need.
Example: at a toy store, the father/mother is the buyer and their son/daughter is the shopper.
Disconnected departments within an organization working for the same personas throughout the same customer journey. A silo develops when information is not shared across departments and Key Performance Indicators (KPI) and goals aren’t in alignment to deliver the entire company’s value proposition. It results in an inconsistent and flawed customer experience.
Those perceiving the experience(s), who hold the power over the money that will be used to pay for the shopper’s goods.
Example: at a toy store, the father/mother is the buyer and their son/daughter is the shopper.
The individual in the role of influencing the buyer and/or shopper in the customer decision-making process.
Example: At a toy store, the father/mother is the buyer, their son/daughter is the shopper, and friends/social media/ads/celebrities/relatives are the influencers.
A class of goods identified by name as the product of a single firm or manufacturer, as well as the reputation, public image or identity that is marketed and/or promoted. This is achieved through products, people, processes, location, communication, and competition.
An additional positive or negative value that customers attribute to products or services based on the brand associated with it. This additional perceived value can affect speed of purchase decision, loyalty, price perception, awareness, forgiveness for potential issues, and perceived experiences.
Example: Positive brand equity: Target can be associated with good service, clean stores, and solid product selection. Negative brand equity: Walmart can be associated with poor service, dirty stores, and haphazard product selection.
A customer is a person who needs something and is willing to pay money to get it, as long as they think the purchase is ‘worth it’. If the seller is able to deliver an experience that is perceived as the most worth it option available on the market, they should expect to achieve strong business results.
A company whose culture focuses on effortlessly and seamlessly fulfilling customers’ needs and current expectations. All individuals in the organization are aware of the direct and indirect impact that their work has on the overall customer experience at every touchpoint.
Customer Feedback Loop
The customer feedback loop is the process of continually gathering insight from customers and improving business processes and offerings based on this insight.
Close the Loop
A term used in business often associated with a “closed-loop” control process, where the output of the system feeds directly into improvements of the system itself. When there’s a problem with the product/service, “closing the loop” is also following up with the customer to correct the problem.
Any innovation, service or feature provided by a company to make them more attractive to customers. Customers must consider if a company’s value proposition is worth it to them before making a purchase decision.
Any part of a customer journey or customer experience where the brand interacts with or influences the customer in any way. This covers any brand communications, direct and indirect interactions, as well as any considerations the customer makes with the brand in mind.
The churn rate, also known as the rate of attrition or customer churn, is the rate at which customers stop doing business with an entity. For a company to expand, its growth rate (measured by the number of new customers in a certain period) must exceed its churn rate.
Return on Investment (ROI)
A performance measure used to evaluate the efficiency of na investment or compare the efficiency of a number of different investments. To calculate ROI, the net profit (or return) of na investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
Example: I spend $400 on a gold watch (investment), and sell it 3 days later for $500, then my return on investment was 25% ($100).
Top of Mind Awareness (TOMA)
In marketing and market research, top-of-mind awareness refers to a brand or specific product being first in customers’ minds when thinking of a particular industry or category.
The capacity to be changed in size or scale. In business, often refers to process implementation, especially in large organizations.
Example: The scalability of the new sales software helped sales representatives reach more potential clients in with the same amount of time and effort.
Person to Person (P2P)
In business, P2P places an emphasis on a human-centered approach to communication, especially regarding marketing and sales. The practice can also be extended to Customer Success, Customer Service, and to some degree, Product.
Regardless of an organization’s size, people are still the fundamental audience, and any marketing materials, communications, or strategies should be designed as such.
Used interchangeably with Human to Human (H2H).
A standard or point of reference against which things may be compared or assessed.
In business, companies use competing products or services as benchmarks.
Compiled from a large amount of data and information about the market, businesses, and consumers that enable intelligent analysis and more assertive decision-making
Business to Consumer (B2C)
Describes when companies deal directly with the final consumer. For most everyday purchases of goods and services, you would be considered a B2C customer.
A customer talking to his energy supplier
A customer buying something in a retail store
A customer buying something in a supermarket
Business to Business (B2B)
When companies deal directly with other companies instead of with the consumer.
Amazon purchases software licenses from Microsoft for department use
CAT sell or leases construction equipment to a contractor
Intel purchases raw materials to manufacture chipsets and other hardware